Credit card bills can sometimes pile up to become a huge burden in your life and create an imbalance in your budget. On top of that, you will be charged penalties and additional interest by the credit card issuer if you fail to make payments on time. This further worsens the situation and creates more debt for you. Two of the main options you have at this time to take charge of your finances are taking a personal loan to liquidate the debt, or applying for a credit card balance transfer.

Banks and financial institutions levy interest rates on personal loans and it may not be a viable option to choose in times of financial emergency. It is like paying off a debt by taking on more debt. This is why you must consider looking for a credit card issuer that offers lower interest rate than your current issuer. Over the course of a few months, while you pay off your credit card debt, you will be paying a relatively lower amount as interest on your dues. If you plan your moves well, you might be able to be pay off your credit card debt early than you would have otherwise.

Some of the top banks in India offer the credit card balance transfer facility. Some banks allow customers to transfer balances up to Rs. 5 lakh and offer low interest rates for up to 6 months before the interest rate associated with the new credit card are charged. They also have a minimum limit of credit card balance transfer to consider your application. The biggest factor is that you can only transfer the amount which is equal to the credit limit of the new credit card.

Avail Better Interest Rates: Mostly banks and financial institutions which issue credit cards offer great deals, discounts, and offers to people in the first few months or years of getting a credit card. Once the initial period passes, the interest rate charged by them might be higher than the ones offered by others in the market. With credit card balance transfer, you can move on to the credit card issuer that is offering a better interest rate to you.

Simplify Finances: If you have multiple credit cards, you might forget to pay one of your credit card bills on time simply since you are likely to lose track of it. This can slowly add up and start to burn a hole in your budget and your credit score. You can consider consolidating the credit card balances from all of your cards to one card which offers the lowest interest rate, and collectively pay off your credit card bill. It is cost-effective and saves a lot of time as well.

Avail Better Offers: Your current credit card issuer might not give you the best terms such as fees, extended grace period, etc. after the first year. By availing the credit card balance transfer facility to a bank offering better offers and terms, you can use your credit card to manage your finances well without paying any extra or hidden charges.

Get Buffer Time: Many banks give a buffer time to credit card holders to pay off their debt after the credit card balance transfer with zero or nominal interest rate. This can translate into a huge relief to the credit card holder since he does not have to pay off heavy interest on top of his credit card outstanding amount.

Receive Immediate Relief: If you cannot deal with your credit card dues right away and feeling stressed because they are piling up, you can get immediate relief by applying for a credit card balance transfer. The whole process is fairly quick and you will also get a buffer time to pay off your dues at zero interest rate. You might also get better deals on your new credit card. The new credit card company pays off your old credit card debt by issuing a Demand Draft (DD).

Hurts Credit Score: It is important to maintain a good credit score to make sure that you are eligible for credit card balance transfer . If a cardholder does frequent credit card balance transfer or have a credit card due balance above 30% of the credit limit, then your credit score might go down.. However, it may still be better than missing out on payments altogether or paying high penalties and interest.

Gets Expensive: Most people get lured by a lower interest rate when they consider a credit card balance transfer facility and forget to pay attention to the processing charges that they have to pay for this balance transfer. It is important to find out if the balance transfer is actually worth taking or not.

Increases Risk of Debt: When you opt for a credit card balance transfer, you may end up with a credit card with a higher credit limit. This may end up making you rack up more credit card debt than you initially started out with.